Seán Ardagh (Dublin South Central, Fianna Fail)
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Question 262: To ask the Minister for Finance his views on including an amendment to the Finance Bill 2007 to include rents paid by local authority tenants in the private rented accommodation relief. [6341/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As the Deputy will be aware, Section 473 of the Taxes Consolidation Act 1997 provides tax relief at the standard rate of tax (20%), up to certain specified maximum amounts, to individuals who pay for private rented accommodation that is used as their sole or main residence.

However, tax relief is not available in respect of tenancies held from Local Authorities. Responsibility for rent schemes was devolved to local authorities in August 1986. The principles governing rent schemes are broadly as follows:

the rent payable should be related to income and a smaller proportion of income should be required from low income households

allowances should be made for dependent children including those under 21 years of age in full-time education

a contribution towards rent should be required from subsidiary earners in the household

provision should be included for the acceptance of a lower rent than that required under the terms of the scheme in exceptional cases where payment of the normal rent would give rise to hardship and

appropriate local factors should be taken into account including the costs of the maintenance and management of the stock of rented dwelling and the adequacy of the rental income to meet such costs.

Within these broad principles, authorities have discretion as to the types of income to be taken into account in the assessment of rents and how to deal with hardship cases, poverty traps and any other anomalies that arise in individual cases. By definition, local authority rents should reflect ability to pay. They bear no relation to economic rents in the private sector.

Local authority rents are heavily subsidised at present. In my view, it would not be appropriate, on the one hand, to provide subsidised housing to a person, at a rent which takes full account of ability to pay, and also offer a further subsidy through the tax system. Furthermore, among the other advantages which local authority tenants enjoy are greater security of tenure vis- a- vis the wider rental sector and the right to buy the property at a market discount.

Paul Connaughton Snr (Galway East, Fine Gael)
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Question 263: To ask the Minister for Finance if he has proposals to reduce the VAT rate on the purchase by local communities of defibrillators; if his attention has been drawn to the fact that the training and the subsequent use of defibrillators can prevent loss of life, and that defibrillators now cost over €4,000; and if he will make a statement on the matter. [6373/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In relation to the issue of reducing VAT rates for a certain category of consumer, the position is that the rate of VAT which applies to a particular good or service is determined by the nature of the good or service, and not by the status of the consumer.

Under the VAT Directive, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. As the majority of defibrillators were not subject to the zero rate on 1 January 1991 it is not possible to apply the zero rate to the supply of such products. Implantable defibrillators are subject to the zero rate.

In addition, Member States may only apply the reduced VAT rate to those goods and services which are listed under Annex III of the VAT Directive. While Annex III does include the supply of medical equipment for the exclusive personal use of a disabled person, it does not include defibrillators for general use. The reduced rate cannot be applied to the supply of defibrillators.

Therefore the only rate of VAT that can apply to the supply of defibrillators is the Standard VAT rate of 21%.

Shane McEntee (Meath, Fine Gael)
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Question 264: To ask the Minister for Finance if there is provision for exemption from the payment of stamp duty when there are very exceptional medical circumstances that require the purchase of a new home adapted to the special needs of a young child; and if he will make a statement on the matter. [6382/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Stamp duty is a tax on certain documents, generally legal documents, used in transferring property or in creating rights for the parties concerned. The stamp duty code generally does not provide exemptions based on an individual's particular circumstances and introducing such a provision would represent a significant departure from normal stamp duty rules. However, I have been advised by the Department of Environment, Heritage and Local Government that a scheme of disabled persons grants is operated by local authorities with capital provision from that Department. These grants are designed to meet the needs of persons who are either physically handicapped or are suffering from severe mental handicap or severe mental illness. Where a new dwelling is being bought or built a maximum grant of €12,700 is payable. In the case of adaptation of an existing dwelling, 90% of the approved cost of the works is available up to an effective maximum grant of €20,320. Full details of the scheme and the conditions applicable are available from the local authority in whose area the dwelling is situated.

I would point out that there is no stamp duty on the purchase of new residential property for owner-occupiers where the dwelling is not greater than 125 square metres and complies with certain conditions in relation to building standards. If the property is over 125 square metres, stamp duty is charged on the site value or one quarter of the total value of the property (whichever is the greater).

You will appreciate that stamp duty is a significant contributor to the Exchequer and stamp duty receipts allow for a broader tax base than would otherwise be possible. These receipts form an important element of State revenues which permits Government spending on services such as health and education.

Paul Connaughton Snr (Galway East, Fine Gael)
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Question 265: To ask the Minister for Finance the position of tax breaks and related issues on the new scheme for the Shannon River Basin; and if he will make a statement on the matter. [6390/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 26 of the Finance Bill 2007 introduces a new pilot tax based scheme for tourism facilities in the mid-Shannon area. The scheme is aimed at encouraging the development of new tourism infrastructure, or the refurbishment of existing tourism infrastructure, in that area. The list of qualifying areas which are to be designated on a district electoral division basis is included in a new Schedule 8B to the Taxes Consolidation Act 1997 which is replicated below. The qualifying period for the scheme will be 3 years from the date of its commencement which will be done by way of Ministerial order. Relief will be available by way of accelerated capital allowances over 7 years for qualifying construction and refurbishment expenditure incurred in the qualifying period. In the case of refurbishment the qualifying expenditure must exceed 20 per cent of the market value of the property before work commences. In areas which are not in the BMW region only 80 per cent of construction and refurbishment expenditure will qualify for relief. The nature of the tourism infrastructure buildings and structures which may qualify under the scheme will be set out in guidelines to be issued by the Minister for Arts, Sport and Tourism in consultation with the Minister for Finance. While relief will be available over 7 years there will be a 15-year holding period in order to avoid a clawback of allowances given. Existing restrictions on the sideways set-off of excess capital allowances against non-rental income for passive investors will apply as will the restriction on the use of specified reliefs by high-income individuals which is effective from 1 January 2007.

Projects wishing to avail of relief must get approval in advance (for which an application must be made within 1 year of the commencement of the scheme) and also must get formal certification after completion. This approval and certification will be given by a special board established for the purposes of the scheme and will be carried out in accordance with the guidelines to be issued by the Minister for Arts, Sport and Tourism, in consultation with the Minister for Finance. Certain buildings such as those that facilitate gaming or gambling are specifically excluded from the scheme, as are licensed premises (but not restaurants). Accommodation facilities that are provided as part of a qualifying project may qualify for relief to the extent that expenditure on such facilities does not exceed 50 per cent of the overall expenditure on the project or such lower percentage as may be specified in the guidelines for the type of project involved. This is subject to the over-riding condition that qualifying expenditure on accommodation facilities may not exceed qualifying expenditure on non-accommodation facilities. The scheme will be notified to the European Commission under the new regional aid block exemption guidelines.

"SCHEDULE 8B

Section 372AW.

Description of Qualifying Mid-Shannon Areas

PART 1

Description of qualifying mid-Shannon areas of Clare

The District Electoral Divisions of Ayle, Ballynahinch, Boherglass, Caherhurley, Cappaghabaun, Carrowbaun, Cloonusker, Coolreagh, Corlea, Derrynagittagh, Drummaan, Fahymore, Feakle, Inishcaltra North, Inishcaltra South, Killaloe, Killokennedy, Killuran, Kilseily, Lackareagh, Loughea, Mountshannon, O'Briensbridge, Ogonnelloe and Scarriff.

PART 2

Description of qualifying mid-Shannon areas of Galway

The District Electoral Divisions of Abbeygormacan, Abbeyville, Ballinasloe Rural, Ballinasloe Urban, Ballyglass, Ballynagar, Bracklagh, Clonfert, Clontuskert, Coos, Derrew, Drumkeary, Drummin, Eyrecourt, Kellysgrove, Killimor (Portumna rural area), Kilmacshane, Kilmalinoge, Kilquain, Kiltormer, Kylemore, Laurencetown, Leitrim, Lismanny, Loughatorick, Marblehill, Meelick, Moat, Pallas, Portumna, Tiranascragh, Tynagh and Woodford.

PART 3

Description of qualifying mid-Shannon areas of Offaly

The District Electoral Divisions of Ballycumber, Banagher, Birr Rural, Birr Urban, Broughal, Cloghan, Clonmacnoise, Derryad, Doon, Drumcullen, Eglish, Ferbane, Gallen, Hinds, Hunston, Killyon, Lumcloon, Lusmagh, Mounterin, Moyclare, Shannonbridge, Shannonharbour, Srah and Tinamuck.

PART 4

Description of qualifying mid-Shannon areas of Roscommon

The District Electoral Divisions of Athleague East, Athleague West, Athlone West Rural, Ballydangan, Ballynamona, Castlesampson, Caltragh, Cams, Carnagh, Carrowreagh, Cloonburren, Cloonown, Crannagh, Creagh, Culliagh, Drumlosh, Dysart, Fuerty, Kilcar, Kiltoom, Lackan, Lecarrow, Lismaha, Moore, Mote, Rockhill, Roscommon Rural, Roscommon Urban, Scregg, Taghmaconnell, Thomastown and Turrock.

PART 5

Description of qualifying mid-Shannon areas of Tipperary

The District Electoral Divisions of Aglishcloghane, Ardcrony, Ballina, Ballingarry (in Borrisokane rural area), Ballygibbon, Ballylusky, Ballymackey, Ballynaclogh, Birdhill, Borrisokane, Burgesbeg, Carrig, Carrigatogher, Castletown, Cloghprior, Clohaskin, Cloghjordan, Derrycastle, Finnoe, Graigue (in Borrisokane rural area), Greenhall, Kilbarron, Kilcomenty, Killoscully, Kilkeary, Kilmore, Kilnarath, Knigh, Lackagh, Lorrha East, Lorrha West, Mertonhall, Monsea, Nenagh East Urban, Nenagh Rural, Nenagh West Urban, Newport, Rathcabban, Redwood, Riverstown, Terryglass, Uskane and Youghalarra.

PART 6

Description of qualifying mid-Shannon areas of Westmeath

The District Electoral Divisions of Athlone East Rural, Athlone East Urban, Athlone West Urban, Ardnagragh, Auburn, Ballymore, Bellanalack, Carn, Castledaly, Doonis, Drumraney, Glassan, Killinure, Moate, Mount Temple, Moydrum, Muckanagh, Noughaval, Templepatrick, Tubbrit, Umma and Winetown."